The Financial Ingredient: Financial Management in the Corporate Strategy Equation

It seems like a principal that is easy to understand; to make corporate decisions you must understand the financial ramifications of the actions that are being taken. How else can you make strategic business decisions; right? You have to consider how the strategic position being taken will affect the company’s financial infrastructure.

While this ideology may be simple to understand it is often ignored (or at the very least undervalued) when company’s are developing their operating strategies. This is not to say that decision-makers don’t consider the financial costs of such decisions, because they might; this is to say that many times they don’t fully under- stand how their financial infrastructure will be affected in the long and short-term as it relates to other factors beyond costs.

When operating strategies are being created, it is incumbent on management to understand how...